Chrysler Sold to Fiat. Immediate Organizational Changes Are Announced

Sergio Marchionne is the new CEO. EVP Steve Landry Retires.

by on Jun.10, 2009

Sergio Marchionne

Chrysler Group needs to sell off its bloated inventory and get factories producing again.

Sergio Marchionne, Chief Executive Officer of the New Chrysler Group, put in place a new organization at the same time the sale of Chrysler to Fiat was completed this morning.

The U.S. Supreme Court late yesterday lifted a stay, allowing the sale to proceed. Under the terms approved by the U.S. Bankruptcy Court in New York and antitrust regulators, the company formerly known as Chrysler LLC formally sold substantially all of its assets, without most of its debts and liabilities, to a new company that will operate as Chrysler Group LLC.

In addition to Mr. Marchionne, currently the Chief Executive Officer of Fiat S.p.A. serving as CEO, Chrysler Group LLC will be managed by a nine-member Board of Directors, consisting of three directors to be appointed by Fiat, four directors to be appointed by the U.S. Government, one director to be appointed by the Canadian Government and one director to be appointed by the United Auto Workers’ Retiree Medical Benefits Trust. The Board is expected to name C. Robert Kidder as Chairman. The process of determining additional board members is continuing.

Chrysler Group LLC said in a statement that it is restructuring to concentrate on the Chrysler, Jeep, Dodge vehicle lines and the Mopar brand of aftermarket parts.

A large, potentially fatal, issue remains with Chrysler’s currently depressed sales levels, and as a result how long it takes to sell off the current inventory. All Chrysler plants have been idled since its bankruptcy filing and it is uncertain when they will resume production. Its suppliers are facing their own insolvencies.

The sales challenge confronting Chrysler as it emerges from bankruptcy is gargantuan. Before the Chrysler bankruptcy filing in March, the company had an average of $5,566 of incentives in effect — roughly 20% to 25% of the wholesale cost of a vehicle — and sales declined almost 50% anyway.

“I personally feel privileged to have the opportunity to lead the New Chrysler and to work with senior management to build this company and our great brands into all we know they can and should be,” said Sergio Marchionne, who today was named Chief Executive Officer of Chrysler Group LLC. “That effort starts with leadership.”

To assist the new company in the transition, Jim Press is appointed Deputy CEO and Special Advisor, reporting to Mr. Marchionne. The company said Press will be instrumental in the restructuring of the Chrysler Group. Press served most recently as Chrysler LLC Vice Chairman & President.

Steven Landry, Executive Vice President, North American Sales & Marketing, Global Service & Parts, announced his intention to retire. Mr. Landry offered to assist the new company in the transition.

Chrysler Open Road Ad Campaign

The sales challenge confronting Chrysler as it emerges from bankruptcy is gargantuan. Before the Chrysler bankruptcy filing in March, the company had an average of $5,566 of incentives in play - roughly 20% to 25% of the wholesale cost of a vehicle — and sales declined almost 50% anyway.

The company announced the following appointments reporting to Mr. Marchionne:

Richard Palmer will lead the Finance organization as Senior Vice President and Chief Financial Officer. In this position, he is responsible for all of Chrysler Group LLC’s finance activities including Corporate Controlling, Treasury and Tax. Mr. Palmer joins Chrysler Group LLC from Fiat Group Automobiles, where he held the position of Chief Financial Officer. Mr. Palmer replaces Ron Kolka who will lead the orderly wind down of Chrysler LLC.

Peter Fong is appointed President & Chief Executive Officer, Chrysler Brand. Fong has profit and loss responsibility for the Chrysler product portfolio. Mr. Fong will be the lead executive for the Sales organization enterprise-wide. He served most recently as the Director of the Mid-Atlantic Business Center.

Michael Manley is appointed President & Chief Executive Officer, Jeep Brand. Manley has profit and loss responsibility for the Jeep product portfolio. Mr. Manley will also have enterprise-wide responsibility for the Product Planning organization, coordinating the product plan and volume requirements of the Chrysler, Jeep and Dodge brands. Manly will work with the other brand Presidents to translate proposed product plans into operating plans for the product development and manufacturing organizations. Mr. Manley served most recently as Executive Vice President, International Sales & Global Product Planning Operations.

Scott Kunselman will  lead the Product Engineering organization as Senior Vice President, replacing Frank Klegon. Kunselman has responsibility for all product development strategy and advance-vehicle engineering. He also oversees product-development processes, testing and validation. Mr. Kunselman recently served as Vice President, Truck Product Team and Core Team Leader.

Michael Accavitti is appointed President & Chief Executive Officer, Dodge Brand. Accavitti has profit and loss responsibility for the Dodge product portfolio. Mr. Accavitti will also have enterprise-wide responsibility for the Marketing organization, coordinating worldwide marketing strategies, brand development and advertising for the Chrysler, Jeep and Dodge. Mr. Accavitti served most recently as Director, Dodge Brand Marketing.

Pietro Gorlier is appointed President & Chief Executive Officer, Mopar Service & Parts and Customer Services. Gorlier has profit and loss responsibility for the Mopar product portfolio and Service & Parts operations as well as Chrysler’s Customer Service operations. Mr. Gorlier has shared accountability with the brands, responsible for parts and services growth and delivery and an integrated approach to customer support. Mr. Gorlier joins Chrysler Group from Fiat Group Automobiles, where he was responsible for Fiat owned dealerships.

Gualberto Ranieri will be senior vice president of corporate communications. More changes will be coming in the public relations organization, no doubt.

Joe ChamaSrour continues to lead the new company’s operations in Mexico as President & CEO, Chrysler de Mexico.

Reid Bigland continues to lead the new company’s operations in Canada as President & CEO, Chrysler Canada.

Marchionne added: “The focus of the Brand organization is to rebuild and grow the company’s four brands, beginning with their strong heritage. The structure is designed to focus on external competition, avoiding product overlap while maintaining the highest possible level of industrial optimization. The new company will align its networks with the brand positions, to restore brand promise and dealer confidence.”

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3 Responses to “Chrysler Sold to Fiat. Immediate Organizational Changes Are Announced”

  1. harry says:

    wow Mopar is a brand at the same level as Dodge or Jeep.

  2. tony says:

    what about the bond holders?

  3. Ken Zino says:

    Bondholders get 29 cents on the dollar, far more than a liquidation would bring.

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